Why prop up the new build market instead of the ENTIRE property market??

VortexSteve

BikingBud said:

Offer significantly less.

As the general belief is that a house is what people are prepared to pay, why on a money saving website do we not encourage that we should pay less for the most significant purchase we are likely to make?

People go to great extremes to set up multiple bank accounts and shuffle money around to generate a few extra pounds or scrape to get the best saving's interest rates or save coupon and vouchers but apparently baulk at challenging the price they pay for a house. They would rather accept that it's normal to have a 30-35 year mortgage than speak the heresy of suggesting perhaps a 10-15% reduction in the house price.  Bizarre!

Unfortunately the house price inflation mantra is believed by too many and the sheeple will not challenge. 

With current demand and supply constraints you'll be lucky to get much discount at all. Perhaps 3-5% at best on a stock plot (if you can find one!)

And coming back to the original post, HTB is not restricted to plots the developer wants to offer it on. The restrictions are from the scheme side (price, FTB etc.)

Crashy_Time

cattie said:

New builds provide work for those in the constuction trade, so it's a boost to the construction industry limiting the HTB scheme to this type of property only. There'd be an awful lot of trades people out of work if there were no newbuilds for them to work on.

Good point, and MP`s went to school with people running the developers so it is a thank you for all those warm fuzzy memories of distant schooldays learning how to milk and herd the public. Zero interest rates were the main prop to the entire market and people with heavy debt loads, but those low rates are really not helping the banks anymore so we need to prepare for attempts to get them raised on the back of "inflation" stories, buying an overpriced new-build just now could be a very bad move IMO.

Crashy_Time

amandacat said:

My daughter bought a new build on HTB as it was the only way she could get on the property ladder but this means due to the inflated price she won’t be able to move for several years without being in negative equity. 
The room sizes are also ridiculously small, the lounge is tiny and you have to walk through the lounge to get to the kitchen and the toilet. 
There were also several snags what needed sorting including the front garden flooding every time it rained which still hasn’t been sorted. 
On the plus it has a nice new bathroom, kitchen, boiler and very efficient heating. 

So she didn`t really climb onto a ladder, not in the normal sense of the word?

mailmannz

This is the problem RelievedSheff....you dont actually get choice with help to buy because it is totally in the hands of developers for how the system is made available to potential buyers. Got a house that cant be moved because its in a !!!!!! part of the development...simples...just make it available with help to buy or part exchange but the price stays the same! Who benefits the most from this arrangement? Not the house buyer because your still buying a house no one would touch at the same premium that it was at before.

I think the idea behind the schemes is good BUT in practice developers have taken full advantage for their own gain and not for the benefit of buyers.

AdrianC

Umm, who held you down and forced you to buy that house in "a !!!!!! part of the development"...?

BigD74

mailmannz said:

This is the problem RelievedSheff....you dont actually get choice with help to buy because it is totally in the hands of developers for how the system is made available to potential buyers. Got a house that cant be moved because its in a !!!!!! part of the development...simples...just make it available with help to buy or part exchange but the price stays the same!

That’s not how it works. Assuming the builder supports HTB, which most are, the equity loan is available on any plot that is below the regional price cap. In my experience of looking at new builds over the last 1.5 years, I have never seen a plot suddenly switched to HTB when it wasn’t before. 

We are using HTB and buying our first house after 17 years of renting. We would not have been able to buy a house without it for another 10 years of saving, by which time I would have been 55+. 

HTB is increasing supply of new builds, thereby decreasing pressure on the supply of non-new build houses as well. Is it a perfect system? Not at all. But it is better then doing nothing and hoping for the market to sort itself out. 

princeofpounds

mailmannz said:

I think the idea behind the schemes is good BUT in practice developers have taken full advantage for their own gain and not for the benefit of buyers.

Despite the 'help to buy' name, it is largely not done for the benefit of buyers. It was always intended as a subsidy that benefits the house builders in the aftermath of the GFC. But like a lot of these things, once the goodies have been given out, it gets harder and harder to remove it, so it's become an established feature of our house buying economy.

This is, in the lingo, a 'demand-side' stimulus - subsidising demand for housing buy throwing more money at it. The problem is that this is absolutely what NOT to do if you have a housing supply shortage. If supply remains restricted, whilst a few more properties may get built that wouldn't otherwise be, the net effect will largely be to push up prices. That benefits the house builders for a period, and then ultimately will benefit land-owners as the cost of developable land rises to meet the new pricing levels once the house builders have worked through their existing land inventory.

If government really wanted to help house buyers, they would pursue supply-side stimulus - remove barriers to the creation of more property. In the UK, the biggest problem is the restrictions and costs imposed by planning system. To be fair, this has also been loosened up a bit in recent years with some reforms to permitted development, but it took government over a decade to get something material going with the new planning reforms (which haven't even been passed yet).

The biggest problem we have in this country is the roadblock of the planning system, which is why we require these monolithic housebuilders constructing identikit slave boxes on soulless estates - they are the only ones with enough resources (political, financial and administrative) to plough their way through the planning system to get homes built in volume. Go to pretty much any western european environment outside of the cities and you'll see plenty of people building homes they intend to live on on individual plots, or small-scale developments, which produces a far nicer environment with a better quality product. And all for lower prices, because the development land is not made so scarce.

Mickey666

steampowered said:

mailmannz said:

Anyway, we are fortunate in not needing help to buy but the scheme, as its designed, doesnt seem to be there for the benefit of buyers and home sellers but for the benefit of property developers.

Yes, that is exactly the point. The government is trying to encourage house building.

I don't think HTB is a particularly good way of achieving that aim, but is a laudable goal nevertheless.

If that's their aim then they should make it easier for people to get planning permission to build their own homes.  An application for a new family home in a village near us was recently refused on the basis that the village did not have 'sufficient services' and therefore the family in question would be dependent on a car!  Social engineering at its most ludicrous by local councils protesting against central government, while HTB lines the pockets of huge developers who throw up large estates of uniform tiny boxes at inflated prices.

Mickey666

princeofpounds said:

mailmannz said:

I think the idea behind the schemes is good BUT in practice developers have taken full advantage for their own gain and not for the benefit of buyers.

Despite the 'help to buy' name, it is largely not done for the benefit of buyers. It was always intended as a subsidy that benefits the house builders in the aftermath of the GFC. But like a lot of these things, once the goodies have been given out, it gets harder and harder to remove it, so it's become an established feature of our house buying economy.

This is, in the lingo, a 'demand-side' stimulus - subsidising demand for housing buy throwing more money at it. The problem is that this is absolutely what NOT to do if you have a housing supply shortage. If supply remains restricted, whilst a few more properties may get built that wouldn't otherwise be, the net effect will largely be to push up prices. That benefits the house builders for a period, and then ultimately will benefit land-owners as the cost of developable land rises to meet the new pricing levels once the house builders have worked through their existing land inventory.

If government really wanted to help house buyers, they would pursue supply-side stimulus - remove barriers to the creation of more property. In the UK, the biggest problem is the restrictions and costs imposed by planning system. To be fair, this has also been loosened up a bit in recent years with some reforms to permitted development, but it took government over a decade to get something material going with the new planning reforms (which haven't even been passed yet).

The biggest problem we have in this country is the roadblock of the planning system, which is why we require these monolithic housebuilders constructing identikit slave boxes on soulless estates - they are the only ones with enough resources (political, financial and administrative) to plough their way through the planning system to get homes built in volume. Go to pretty much any western european environment outside of the cities and you'll see plenty of people building homes they intend to live on on individual plots, or small-scale developments, which produces a far nicer environment with a better quality product. And all for lower prices, because the development land is not made so scarce.

Hear hear!  Spot on!

AdrianC

princeofpounds said:

The biggest problem we have in this country is the roadblock of the planning system, which is why we require these monolithic housebuilders constructing identikit slave boxes on soulless estates - they are the only ones with enough resources (political, financial and administrative) to plough their way through the planning system to get homes built in volume. Go to pretty much any western european environment outside of the cities and you'll see plenty of people building homes they intend to live on on individual plots, or small-scale developments, which produces a far nicer environment with a better quality product. And all for lower prices, because the development land is not made so scarce.

No, it's nowhere near that simple.

Developments are in high demand... but not everywhere.
Where urban and suburban developments are particularly high demand, the economics of buying a brownfield ex-industrial site and splitting it off into individual plots just cannot work.

The easy infills, big-back-garden-devs, and hovel-replacements have already been done, long since.

So that leaves brownfield. Even if we ignore the economics of it, who wants the hassle factor of buying an old factory site to knock down and decontaminate, just so they can carve a quarter of an acre off and then flog the rest to somebody else...? Either in quarter-acre parcels or as a whole? You can bet the previous owner of the factory doesn't want that grief - they just want the whole lot gone.

If you start to look at rural locations, then it all becomes much more possible. I could point you to umpteen small-scale (single-figure) infill devs round here in the last few years - and as many plots, or places crying out to be massively refurbed or demolished and started-again. But, again, who can afford to buy a field and do a Kevin without selling their old place first? Who's going to lend half a million quid against a muddy field and a scrawled sketch or three? And do the numbers even add up in many lower-cost rural locations?

One of my nearest towns has a choice all within about 100m on the same road... £100k new-build flats which are still for sale nearly a decade after completion but have been let by the developers in the meantime, A <£300k 4-bed Victorian semi with land and garaging... and an old builder's yard being redeveloped by a small local builder for 9 2- and 3-bed places... The land was being marketed for £250k for half an acre, no s106.